Methanol, which produced in large quantities from low-quality coal and the hydrogenation of CO₂, is a potentially renewable one-carbon (C1) feedstock for biomanufacturing. The methylotrophic yeast Pichia pastoris is an ideal host for methanol biotransformation given its natural capacity as a methanol assimilation system. However, the utilization efficiency of methanol for biochemical production is limited by the toxicity of formaldehyde. Therefore, reducing the toxicity of formaldehyde to cells remains a challenge to the engineering design of a methanol metabolism. Based on genome-scale metabolic models (GSMM) calculations, we speculated that reducing alcohol oxidase (AOX) activity would re-construct the carbon metabolic flow and promote balance between the assimilation and dissimilation of formaldehyde metabolism processes, thereby increasing the biomass formation of P. pastoris. According to experimental verification, we proved that the accumulation of intracellular formaldehyde can be decreased by reducing AOX activity. The reduced formaldehyde formation upregulated methanol dissimilation and assimilation and the central carbon metabolism, which provided more energy for the cells to grow, ultimately leading to an increased conversion of methanol to biomass, as evidenced by phenotypic and transcriptome analysis. Significantly, the methanol conversion rate of AOX-attenuated strain PC110-AOX1-464 reached 0.364 g DCW/g, representing a 14% increase compared to the control strain PC110. In addition, we also proved that adding a co-substrate of sodium citrate could further improve the conversion of methanol to biomass in the AOX-attenuated strain. It was found that the methanol conversion rate of the PC110-AOX1-464 strain with the addition of 6 g/L sodium citrate reached 0.442 g DCW/g, representing 20% and 39% increases compared to AOX-attenuated strain PC110-AOX1-464 and control strain PC110 without sodium citrate addition, respectively. The study described here provides insight into the molecular mechanism of efficient methanol utilization by regulating AOX. Reducing AOX activity and adding sodium citrate as a co-substrate are potential engineering strategies to regulate the production of chemicals from methanol in P. pastoris.